Credit Corp Group Limited · ASX:CCP
Credit — Investor Presentation (May 2016)
18 slides from Credit's investor presentation, May 12, 2016
Slide 1: FY16 May Update
For personal use only FY16 May Update 12 May 2016 Thomas Beregi, CEO Michael Eadie, CFO
Slide 2: Competitive leadership in the credit-impaired consumer segment
Competitive leadership in the credit-impaired consumer segment For personal use only FY16 May Update | 2
Slide 3: Core business leadership and diversification for sustained growth
Core business leadership and diversification for sustained growth… For personal use only Australia / NZ USA Debt Buying (Core) Consumer Lending Debt Buying • Operational superiority • The sustainable alternative for • Large market consumers with impaired credit records - Highest asset turnover (1.6x
Slide 4: To build on our track record of strong financial performance
…to build on our track record of strong financial performance For personal use only Cents ROE per share % EPS CAGR 21% 22% 23% 17% 96 83 DPS 75 70 EPS 58 ROE 47 45 44 40 37 31 29 20 8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 * * FY16 midpoint of most recent market guidance FY16 May Update | 4
Slide 5: Increased opportunity to invest at our target rate of return
Increased opportunity to invest at our target rate of return… For personal use only Jan 16 Expectation May 16 Update • PDL acquisitions $185m - $195m • Existing forward flow contracts renewed • Continued US purchasing • Attractive one-off purchases • Purchasing now on track for $225m - $230m • Net l
Slide 6: Financial capacity to seize opportunities across all markets
…and the financial capacity to seize opportunities across all markets For personal use only • Significant covenant capacity $400m $350m $300m PDL Carrying $250m Value Net Consumer $200m Loans Carrying Value Covenant capacity $150m Borrowings $100m $50m - FY15 1H FY16 Apr 16 FY16 May Update | 6
Slide 7: Operational metrics maintained - pricing discipline and accuracy
Operational metrics maintained - pricing discipline and accuracy For personal use only Cumulative Collections $m 2,000 Actual cash collections 1,500 1,000 Initial projections 500 - Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Apr 16
Slide 8: Operational metrics maintained - collection life-cycle
Operational metrics maintained - collection life-cycle PDL collections by date of purchase For personal use only $m On track for record collections (1) 11% 90 80 70 23% 30% 32% 32% 24% 28% 60 25% 26% 29% 31% 32% 23% 23% 13% 50 12% >3 years 12% 12% 17% 17% 15% 11% 13% 13% 13% 14% 16% 15% 2-3 years 40
Slide 9: Operational metrics maintained - productivity
Operational metrics maintained - productivity For personal use only Debt purchase productivity (direct collection staff only) PDL collections per hour ($) 300 250 YTD Apr-16: $205 FY15: $200 200 2014/15 2015/16 150 100 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY16 May Update | 9
Slide 10: Operational metrics maintained - payment arrangement book
Operational metrics maintained - payment arrangement book For personal use only Total Portfolio Jun 14 Dec 14 Jun 15 Dec 15 Apr 16 Face value $4.7bn $4.8bn $4.9bn $5.1bn $5.3bn Number of accounts 744,000 698,000 703,000 687,000 682,000 Payment Arrangements Face value $909m $963m $1,044m $1,099m $1,1
Slide 11: Favourable opportunities seized to produce record PDL investment
Favourable opportunities seized to produce record PDL investment For personal use only • Continued renewal of forward flows • Attractive one-off purchases FY16 Purchasing Guide: $225m - $230m Domestic $184m $220m Apr 16 FY16 US Purchasing Pipeline $136m $136m $70m $36m $9m $7m FY14 FY15 FY16 FY17 Ac
Slide 12: Continued consumer loan book growth
Continued consumer loan book growth For personal use only Gross loan book excluding provisions $130m $121m $100m Gross loan $72m book (excluding provisions) $63m $56m Annualised revenue $35m $19m $11m $6m Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Apr 16 FY16 May Update | 12
Slide 13: Consumer lending volumes maintained
Consumer lending volumes maintained For personal use only • Gross lending volumes remain strong - Transition to longer duration products - Wallet Wizard brand recall driving volume - Net lending market guidance increased • Strategies for continued growth - Leveraging our uniquely sustainable offerin
Slide 14: Earnings and return growth on track
Earnings and return growth on track For personal use only • Profitability and returns are improving as book increases in size • On track to achieve pro-forma returns in coming periods Average net ROA % NPAT $m book size $m (1) 10% 10.0 120 100 5% 5.0 80 60 0% - 40 -5% (5.0) 20 - -10% (10.0) FY14 FY1
Slide 15: In the US we are making the best of challenging conditions
In the US we are making the best of challenging conditions… For personal use only • Supply conditions unchanged - Proposed rules from federal regulator continue to be delayed - Major issuers have not returned to debt sale - Consent orders with large debt buyers provide a form of rule-making • Operat
Slide 16: Signs of more favourable pricing conditions
…and there are some signs of more favourable pricing conditions For personal use only • Despite unchanged supply conditions, major debt buyers recently reporting ‘rational’ pricing and improving returns Purchase price multiple on current year purchases (1) FY14 Q4 FY15 Portfolio Recovery Associates
Slide 17: Updated FY16 Guidance
Updated FY16 Guidance For personal use only Issued Jan 16 Updated May 16 PDL acquisitions $185m - $195m $225m - $230m Net lending $30m - $40m $45m - $50m NPAT $44m - $45m $44m - $45m EPS (basic) 95 - 97 cents 95 - 97 cents FY16 May Update | 17
Slide 18: Questions
For personal use only Questions FY16 May Update | 18